Property and the squeezed middle
SINCE the financial crisis, Ireland’s love affair with property has waned but this is still a nation of property owners, and aspiring owners, many within the middle classes. There is little doubt the crisis threatened the security of the middle class, a threat which has still not fully receded; however, after the crisis there is now an opportunity to build a new social consensus for all citizens to share, a challenge which is giving rise to political anxieties, although not to the extent it is in other parts of the world, with the middle class here certain to contribute signifiantly to building of that new Ireland.
In an interview in this newspaper today, the Taoiseach, Leo Varadkar, tells of his concern for people who want to buy a home for the first time, referring to those in his own age group, late 30s, who have not yet bought property. People used to often buy a home in their 20s, he says, but because of the recession there are now a lot of people of this age and older who rent and would like to buy a home.
It may be that the crisis has ushered in a new era in which the middle-class aspiration of property ownership will remain beyond the reach of many in this new generation and that the relative norm elsewhere of rented accommodation will apply for a considerable time. While Mr Varadkar is correct to say that property prices are 30pc under peak, home ownership still remains beyond the reach of a great number of his generation (and an indebted burden to many others). The reasons are complicated, not solely related to supply to meet demand which is rather simplistically argued by some. Mr Varadkar would be wise to adopt a co-ordinated policy approach if equilibrium is to be restored to the property market, not least to actively manage investment behaviour as was urged by a writer in this newspaper last week.
The term “middle class” was originally devised to describe merchants, tradesmen, investors and skilled craftsmen who inhabited walled cities — the burg, bourg, or borough — which gave rise to les bourgeois. In today’s usage, “bourgeois” has changed to mean people who are rather square, unfashionable, boring, even narrow-minded and certainly suburban.
However, almost everyone agrees that the middle class pays the lion’s share of taxes. It may be deeply in debt, even “endangered”, and is no doubt “squeezed” as has been said by this newspaper; even crippled and at risk of being hollowed out, as has also been stated. That would be a great tragedy were it to occur. We believe the middle class will cope as always, and must endure. It may suffer from an erosion of net worth. Its decline is blamed for a widening income gap. It is courted by left and right in election years, each trying to outdo the other in praise for its attributes. The middle class will remain the backbone of our economy and of this country, however. In recent years it has become fashionable again, in certain quarters, to sneer to the suburban middle class, akin to the anarchic catch cry that ‘property is theft’; or that the owner of property must be swept out of the way and made impossible, as was stated by Marx. But this newspaper would state, unashamedly, that the middle class are solid citizens; decent, hard-working and law-abiding, to be respected and admired, and would encourage Mr Varadkar to do all in his power to assist the noble aspiration towards property ownership for his and generations to come.